Discrimination by Homeowner Associations - What is it and are you doing it?

Many homeowner associations, at one point or another, have discrimination charges filed, or threatened to be filed, against them. For the most part, such threats and charges are a direct result of the association enforcing the terms of its governing documents and compelling residents to do something they don’t want to do, or prohibiting residents from doing something they want to do. Sometimes these threats and charges are valid and many other times they are not. Who can tell? This article addresses the protected classes and types of discrimination they face.

The primary federal statute that applies to homeowner associations, addressing housing discrimination is the Fair Housing Amendments Act (“FHAA”). Although the Americans with Disabilities Act also addresses housing discrimination, it does not normally apply to homeowner associations and will not be addressed by this article. Additionally, Colorado has a state statute (Colorado Civil Rights Act) that prohibits housing discrimination. If an association is found to have discriminated under the FHAA or the Colorado Civil Rights Act (“CCRA”), it may be ordered to pay damages to the victim (ranging anywhere from $1 to over $1million, based on the facts), attorney fees and possible fines.

Protected Classes
The FHAA and CCRA establish “protected classes” of people making it unlawful to treat persons differently due to their protected class. Protected classes under the FHAA include : race, color, religion, sex, handicap, familial status and national origin. The CCRA adds marital status, creed, ancestry and sexual orientation as protected classes. The two classes that affect homeowner associations the most are the handicap and familial classes. Each one is addressed separately below.

Handicap. “Handicap” is defined as a physical or mental impairment which substantially limits one or more of a person’s major life activities; a record of having such an impairment, or being regarded as having such an impairment. Although “major life activities” is not defined by the FHAA, courts generally agree that this term includes caring for one’s self, performing manual tasks, seeing, hearing, speaking and breathing. Discrimination based on handicap primarily occurs when an association refuses to give a reasonable accommodation to a handicapped resident when such an accommodation is needed.

Familial Status. Discrimination based on family status includes unequal treatment of children under the age of 18 who live in the community, pregnant women and families based on their size or content. For example, many associations adopt rules prohibiting children from playing on common elements. This is a typical example of a rule that is discriminatory under the FHAA. Another example of a rule that may constitute a discriminatory practice under the FHAA is one that defines the term “family” as a certain number of persons as well as certain occupancy standards.

Types of Discrimination
The law recognizes two types of discrimination: discriminatory treatment and disparate impact. Discriminatory treatment is where the victim is expressly treated differently then others in the community based on his/her protected class. The rule prohibiting children from playing on common elements is an example of discriminatory treatment because the rule expressly acknowledges that the children are being prohibited from doing something that others are not based on their status as children.

Discrimination through disparate impact occurs when a neutral rule has the effect of discriminating against a protected group. A typical example of this type of discrimination is a rule that prohibits tricycles in the community. Although the rule does not specifically single out children, it has the effect of only affecting children because adults do not usually ride tricycles. Thus, such a rule is likely to be considered discriminatory based on disparate impact.

Better Safe than Sorry
Because associations are not always aware of what can constitute discrimination, and because the penalty for violating the FHAA can be quite costly, associations should be very careful when adopting rules and regulations, and have their legal counsel review any proposed rules prior to their adoption. Furthermore, associations should always notify their legal counsel if a discrimination complaint is received. Finally, it is always safer to involve your legal counsel when a resident claims he/she is handicapped and requests an accommodation.